Stock market records zero IPOs in 2 years - PwC
The Nigerian Stock Exchange has not recorded any Initial Public Offerings (IPOs) for private companies to generate capital in the last two years, a report from PwC has said.
The research firm in its 2017 Africa Capital Markets Watch said in contrary, capital raised from IPOs by companies on the Johannesburg Stock Exchange (JSE) in US dollar terms increased by 178% in 2017 with $424.1 million as compared to 2016.
The report said in the last five years only 4 IPOs were recorded by the Exchange with total proceeds of $760m.
The report said, in 2017 capital raised from IPOs by companies on African exchanges, excluding the JSE, decreased in US dollar terms by 33% as compared to 2016, largely driven by reduced or no activity in markets such as Algeria, Morocco, Ghana, and Mauritius, partially offset by an increase in IPO value in Tanzania.
“2017 was a record year for the DSE in Tanzania, which launched the muchanticipated IPO of Vodacom Tanzania, among the top ten IPOs in 2017. As noted above, IPO activity on the North African stock exchanges - Egypt, Morocco, Tunisia and Algeria - decreased by 61% in terms of value of IPO proceeds, primarily due to the non-recurrence of significant listings on the Casablanca and Algiers exchanges when compared with the prior year.
“There was also no IPO activity in 2017 in Ghana compared to 2016, which saw $102.0 million raised on the Ghana Stock Exchange. This year, the Nairobi Securities Exchange and Nigerian Stock Exchange both extended their IPO drought, with no new IPO capital raised in either 2016 or 2017.”
The report further said in contrast, elsewhere on the continent, 2017 saw some significant increases in IPO value on exchanges in Namibia, Rwanda and Tanzania compared to 2016.
“Though the JSE maintained a dominant role in terms of location of the top ten African IPOs in 2017 by value and number, the performance of these newly listed JSE entities has been mixed, with the most notable declines due to entity-specific events. The comparatively stronger US dollar-equivalent performance of these shares was driven by the strengthened rand at year-end visà-vis US dollar exchange rates throughout the year.”
The share price performance of the top ten 2017 African IPOs in the majority of the other markets demonstrated positive returns. Ecobank Côte d’Ivoire, the BRVM’s largest IPO for 2017, achieved the highest increase in share price performance of the top ten African IPOs with a share price trading 48% higher as at 29 December 2017. Other African